Liverpool council is planning to invest up to £6m in the property market – buying up homes to rent them out.

The move is part of a drive to bring up to 1,000 homes across the city back into use.

City leaders will also use some of the cash – coming out of its capital reserves – to give loans to people to do up their properties that are currently empty or derelict.

The scheme will also see small and medium-sized firms given the opportunity to bid for contracts worth up to £100,000.

Opposition figures welcomed the move, saying an end to mass demolitions was welcome.

Assistant mayor of Liverpool Cllr Ann O’Byrne said the project would also see the council embark on an “invest to earn” pilot scheme with a housing association.

That would mean houses would be rented out and the profits put back into refurbishing more homes.

Cllr O’Byrne said: “Our work to bring empty properties back into use is having a real impact on our neighbourhoods, and this latest investment will enable us to propel this work further than ever before.

“We will be delivering a range of new projects which will make a further significant dent in the number of vacant properties in the city – from providing financial incentives to property owners, and taking tougher enforcement action against those who fail to co-operate with us, to developing new projects with our social housing partners.

“This new pot of funding means we can take even bigger strides forward in our on-going work to deliver thriving and attractive neighbourhoods, in every part of Liverpool.

“It’s great news for the city – and it’s great news for small, local builders, who will be able to bid for the refurbishment work.”

The council’s empty homes project, launched in 2012, has brought 948 vacant properties back into use so far, with 951 more in the pipeline.

Mayor of Liverpool Joe Anderson said: “I pledged to bring at least 1,000 properties back into use during my term of office.

“We are already on-track to surpass this target, but I want us to go even further, and this additional funding will allow us to build on the huge amount of work that is going on, across the city.

“It reaffirms our commitment to do everything in our power to tackle the empty properties which blight our neighbourhoods. It will enable us to get tougher on irresponsible homeowners.

“And it will allow us work with our partners to better target some of the major problem areas in the city.”

Liberal group leader Cllr Steve Radford said it was important the scheme was “precision managed” so that the most needy areas were targeted.

He added: “When there are just one or two empty properties in a street the people next door become worried about arson.

“Using money on projects like this should improve community safety. We’ve already got some money coming into my ward in Tuebrook and hopefully more from this. “It’s the right thing to do.”